Cornton Vale prison, near Stirling, will close its doors to remand and convicted women prisoners in four years' time.
Inmates will be transferred to a new high-security female-only HMP Inverclyde in Greenock, which is due to open in 2017, as well as a number of smaller units across the country.
Cornton Vale was nicknamed "the vale of death" after 11 prisoners committed suicide between 1995 and 2002. Despite attempts to improve conditions, ministers decided to close the prison after criticism by the former Lord Advocate Elish Angiolini that it was "not fit for purpose".
The father of one young woman who took her own life in the prison has welcomed the closure. Jim Bollan, 66, whose daughter Angela, 19, from Renton, West Dunbartonshire, died in 1996, said more work should be done to provide alternatives to custody for women.
"I'm glad it's going to close but I think it should be shut this year and alternatives to detention brought in for the women who shouldn't be in prison," he said.
"When my daughter died, there were calls for the prison's closure and the Scottish Government said that would be considered. Yet here we are in 2014 and it's still open and it's going to be open for another four years."
Mr Bollan, who is a Scottish Socialist Party councillor in West Dunbartonshire, added: "Angela had a drug addiction which led her into shoplifting to feed her habit. If there had been a community-based facility where she was forced to address her offending behaviour she might still be alive."
Dame Elish's commission on women offenders found only 2% of female prisoners had been jailed for serious violent crime, more than half were re-offenders, and around 80% had mental health problems.
Her report recommended jailing fewer women and addressing the high number who end up in prison as a result of addiction, abuse and poor mental health. The commission added that overcrowding had caused "significant problems" for staff and had made rehabilitation difficult.
HMP Cornton Vale was built in 1975 and from 1978 it began taking women on remand as well as prisoners who had been convicted.
It currently has a capacity for 309 prisoners, including 24 women nearing the end of their sentence who are accommodated in independent living units outside the jail, and seven mother-and-baby spaces inside the prison.
Around 300 staff will be given the option of working elsewhere in the prison system. No decision has been made about what will happen to the Cornton Vale site.
A spokesman for the Scottish Prison Service said: "HMP Cornton Vale will close in 2018. The long-term future of the site has yet to be determined."
He added that in addition to smaller units for women at Grampian and Edinburgh, there would also be a new national facility at Inverclyde opening in 2017.
A Scottish Government spokeswoman said: "HMP Cornton Vale will be closed once its replacement as the national prison facility for women has been built. Major construction projects like this take time but, in the meantime, conditions and facilities at Cornton Vale continue to be improved, including improvements to several wings, and the creation of a new family centre and help hub.
"Around 100 women have been moved out of the prison to facilities at HMP Edinburgh and HMP Grampian. The new HMP Inverclyde, which will replace Cornton Vale, is being designed and constructed specifically to meet the needs of women offenders, as recommended by the Angiolini Commission.
"It will create an environment where women prisoners will be able to access the kinds of support, guidance and activities which will help them address their problems, and work towards a future away from crime."